Sun
Tzu said: “I go
where he
is not.”
Sounds good. But what
does this mean in
‘real’ terms?
Let’s look at
Toyota’s entry into
the Indian market. It
entered late, when the
other auto majors were
already shipping
passenger cars from
their plants. Toyota
owned brands which
enjoyed very high
equity with the Indian
high-end-product
consumer, and so had a
lot going for it to
make a dent in the
passenger car market.
But what did Toyota
Kirloskar Motor (TKM)
do instead? It entered
the multi-purpose
vehicle(MPV) segment
with Qualis. The only
comparable competition
was Tata Sumo. The
segment had great
all-India potential,
including the hallowed
rural markets. Was
there a better way of
spreading distribution
reach, building
infrastructure,
developing vendors and
creating mass-market
consumer awareness of
the brand? It was the
ideal foundation for
the subsequent
passenger car market
entry. And a low risk
strategy to boot, due
to low investment and
lower expectations
from the customer.
What did all the other
carmakers entering
India do? Home on to
the obvious, passenger
cars, and struggle as
the expected bloodbath
erupted.
Interestingly, each
had an MPV in its
product stable. Of
course, if TKM had
been the first one off
the block, perhaps the
best approach would
have been a passenger
car segment entry. To
put things in context,
Toyota’s Indian
market entry was a
triumph of hope over
experience. Remember
LCVs from DCM-Toyota?
As an aside, it was
equally a tribute to
the wooing skills of
Vikram Kirloskar who
persisted for seven
years to convince
Toyota to plunge into
its second Indian
marriage.
The choice TKM had was
between a tenuous
toehold in a
glamourous segment or
planting both feet
firmly in another. It
chose the latter, and
worked on
consolidating
successes and moving
incrementally in a
step-by-step approach.
TKM secured a flank,
ensured its hold over
the MPV market, put
the supporting
infrastructure in
place before entering
the main battle of the
passenger car market,
where both Corolla and
Camry are doing quite
well for themselves
today.
As always, a strategy
is only as good as the
results. And TKM’s
results say it all --
profitable in three
years and set to wipe
off accumulated losses
by 2006.
In hindsight, this
strategy seems fairly
simple and
straightforward. In
1997, when TKM was
incorporated, it was
anything but that. The
dilemma which TKM
faced while taking
this decision was
probably gut-wrenching
and divisive. It
appears otherwise only
because things worked
out.
‘I go where he is
not.’ Sounds simple.
But is tough in
practice because it is
counter-intuitive. It
requires a very
different way of
thinking. A mindset
which can also look at
issues indirectly,
beyond the obvious and
not always as a
structured linear
progression.
Also, this approach to
strategy is meant for
those with a much
longer time-horizon.
Of course, the results
are equally
long-lasting. You
might have to walk
slow, but like Abraham
Lincoln, you’ll
never walk backwards!
This is not a
glamourous approach.
Definitely more
practical.
To offer another
example from the field
which has given us the
concept of strategy
and contributed
everything we know
about it, including
Sun Tzu’s work --
the Military. During
the Kargil war, the
attacks by the Indian
Army which succeeded
were the ones that
followed, what is
referred to in
military jargon as,
‘the least likely
approach’ (from the
defender’s
perspective). In
practical terms, it
meant climbing
vertical cliffs. It
was tough.
Excruciating. But it
got results.
Similarly, following
an indirect approach
in business strategy
is fairly tough. But
yes, it surely gets
results.
To put things in
perspective, an
indirect approach is
merely a means to an
end and not an end in
itself. ‘I go where
he is not’ -- does
not mean that you go
where you don’t need
to! If you go and
stake your claim to a
desolate spot where a
presence doesn’t
make sense, you’re
only using up precious
time and resources.
Being different for
the sake of being
different is best left
to teenagers and rock
stars.
To clarify, at times,
being present at the
topmost end of a
market is not
profitable, but the
positive rub-off on
the products present
in the mid-market or
the lower-end is
enormous. In such
circumstances, though
you are present in an
unprofitable spot, it
still helps you
achieve your aim!
Moving down to the
tactical level, ‘I
go where he is not’
is just another
definition of
‘positioning’.
After all, positioning
a product is about
being singularly
defined in the
consumer’s
consciousness and
excluding the
competition from that
space. When Ries and
Trout first wrote
about their concept of
positioning in 1969,
they also highlighted
that you can never win
‘head-on’ against
the market leader. You
do not pitch what your
competitor is already
perceived to be. If
you do, then you’re
just a me-too.
Instead, you emphasize
yourself to be what he
is not. Sounds like
Sun Tzu talking?
You can also use this
dictum to shape your
leadership journey
much more effectively.
But as a warning,
please don’t jump to
the conclusion that
you need to be
different. It will
only get you into
trouble! More on that
in another column.
Finally, an indirect
strategy, above all,
has to be aligned to
your aim. It helps you
get to your interim
objective(s), making
the move forward to
your ultimate goal
easier. As
demonstrated vividly
in the case of TKM,
the MPV segment was
merely the first step
towards ensuring a
successful passenger
car market entry,
which had always been
the intent. You go
where he is not in
order to get where you
finally want to.
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